This summer Natixis published a joint strategists' outlook for the second half of 2025. While many of its calls appear prudent as 2025 rounds out, the memorable aspect of their brief was its curiously simple, almost mundane, title: There Are Reasonable Alternatives.
Yet that choice was anything but. Instead today, as the year ends, it looks more like a plant-flagging exercise, one underscoring a debate that has simmered across nearly two decades of post-Global Financial Crisis investing, and now coming to a head.
More a question of philosophy than strict ideology, that fight has pinned TINA, or There is No Alternative to US equities (technology megacaps, lately) against the worldlier, or at least less monolithic, TARA. The one tipped in the Natixis headline.
Changing Times: For much of the last 15 years, TINA's argument has held up. Often cited and charted, meme'd, celebrated and maligned for its simplicity and cost. Especially in passive indexation relative to more fee-intensive or active and complex strategies. While diversification didn't completely evaporate, managers often say TINA was the decisive last word on a close call. It was probably also part of endless calls to buy the dip.
Indeed the sentiment has led to daily records and concentration - to buoyancy that has stuck through a broad range of disruptions. Though it was also one built over a generation of performance, where admonishment was due for anyone who assumed they could be clever and out-duel the S&P.
Until now, when that index is getting beat. By gold (again), by many emerging markets, and even some European ones.
Thus it was with some elegant Parisian straightforwardness that Natixis ran with TARA in July, safe in an assumption that this time, finally, the moment had come. So what do those alternatives look like in relation to emerging markets? EM has gathered some flowers; small bouquets anyway, with EM Debt and certain frontier equities especially showing out.
And unlike the more complicated gold hysteria that hit orbit and receded this fall, there is ample reasonableness behind the global flows that have rotated steadily into EM throughout year, and for the most part, stood firm.
Beyond Dialectic: Structural improvements, good-or-great carry, a weaker dollar and the broader macro context all remain attractive for EM. But as always the question remains: just how sustained is the turn to 'reasonableness'? Can a mindset change from cyclical to secular thesis bring the industry around to stake new EM product innovation and stick with it, in a space that has struggled to put together three-year track records without a serious, albeit usually explainable, drag back?
In short: is today's enthusiasm a question of new conviction, or simply not knowing where else to turn? That evidence is still to come in 2026. But at least the new normal means more nuance, and putting the TINA-or-TARA dialectic aside.
